Points Deductions and CVA's

[Uncle Buck]

Taken from todays Guardian;

League sets 25-point penalty benchmark for insolvency | Football | The Guardian

League sets 25-point penalty benchmark for insolvency

Football League clubs which fall into insolvency and then fail to exit via a Company Voluntary Arrangement (CVA) can now expect to be deducted 25 points in total, following the upholding last week of a similar sanction imposed on Leeds United. Clubs are expected to encounter this problem increasingly because Her Majesty's Revenue & Customs, always a substantial creditor where football clubs go into administration, is routinely voting against CVAs.

The Football League requires clubs coming out of insolvency to agree a CVA, a settlement which requires acceptance by 75% of creditors. HMRC has long refused to agree to be paid only a proportion of the tax and VAT it is owed while under the League's "football creditors' rule" players' wages, and any money owed to other clubs, are being paid in full.

Leeds incurred the automatic 10-point penalty when the club went into administration last May, then accepted a further 15-point deduction in League One when they failed to achieve a CVA. Having promised in writing not to take legal action, Leeds then initiated proceedings in the high court, seeking to have the 15 points reinstated, and the action was referred to arbitration.

Last week a three-man arbitration panel upheld the 15-point penalty as "reasonable and proportionate" in the circumstances, because Leeds had been seeking to join League One without complying with the rule that they had to achieve a CVA after going into administration.

Lord Mawhinney, the Football League's chairman, said of the ruling that he was very satisfied that the League's authority and rules had been upheld, and that the insolvency policy would continue to apply to the League's clubs.

Mawhinney added that while the League did not want to be bound strictly by the precedent of 25 points having been deducted from Leeds, that sanction is now "an established fact".

Each case will be judged on its merits, but Leeds' 15-point deduction on top the automatic 10-point penalty sets the bar for clubs which go into insolvency and fail to agree a CVA.

 

[byf]

I was just checking the league one table out again.

Leeds could have been deducted 40 points and still stayed up pretty impressive!

 

[Uncle Buck]

Also this article;

A simple reason behind the defeat of Leeds' appeal | Sport | Guardian Unlimited

I thought from some of the Leeds posters on this board there was a pile of evidence that the league had got this wrong?

 

[Hiney]

So the League have 'set a 25-point benchmark' but don't 'want to be bound by the precedent' and 'each case will be judged on it's merits'.

Brilliant!

Good work Mawhinney you spineless TOSSPOT

 

[1234andcounting]

David Conn writes intelligent, well-researched articles, usually about struggling clubs, exposing dodgy dealers etc. He should be running football in this country imho.

 

[Curious Orange]

So the League have 'set a 25-point benchmark' but don't 'want to be bound by the precedent' and 'each case will be judged on it's merits'.

Brilliant!

Good work Mawhinney you spineless TOSSPOT

Don't be so quick to judge, the points deduction was a compromise agreement with Leeds because they didn't want to take the more usual penalty of starting the season in League Two. The actual points deduction that took the place of relegation could have been anywhere between 10 and 25 points from what I gather - the League being keen in general that such deductions are appropriate to the club in question (ie. a club that doesn't have the spending power of Leeds would most likely have got less).

You could probably argue that they got the amount of points deducted wrong in this case.

 

[beorhthelm]

hmmm. this totally fails to address what happened: a club could still go bankrupt once relegation is a certainty then when faced with the HMRC not accepting the CVA they create a new company, transfer the necessary, fold the old one, and beg the FL to let the new one take over in the same place.

imho this loophole needs to be directly addressed with a specific points deduction.

 

[Curious Orange]

hmmm. this totally fails to address what happened: a club could still go bankrupt once relegation is a certainty then when faced with the HMRC not accepting the CVA they create a new company, transfer the necessary, fold the old one, and beg the FL to let the new one take over in the same place.

imho this loophole needs to be directly addressed with a specific points deduction.

Probably just as well that the Football League Board are meeting up to discuss just that then!!

 

[beorhthelm]

actually reading the comments from Uncle Bucks Guardian link, it seems there is already remedy in place to either relegate or expell a club try such a trick (i was aware of the later). So, as pointed out, the 15points was very lenient. and the only rules the FL broke where done so to Leeds' advantage. then they make a fuss

Bateshas spun this and made everyone question it all when in reality the situation was of his making and he agreed to a points deduction rather than relegation/expulsion. When will genuine Leeds fans see what happend and not believe his bullshit?

 

[BensGrandad]

Have the FL not set a date by which clubs go into administration lose the points during the current season or the next. I would suggest transfer deadline time in March as the cut off

 

[Herr Tubthumper]

So the League have 'set a 25-point benchmark' but don't 'want to be bound by the precedent' and 'each case will be judged on it's merits'.

Brilliant!

Good work Mawhinney you spineless TOSSPOT

I'm not quite sure what your issue is here. This makes sense to me. I also think the League have handled this well. Dealing with the smoke, mirrors and lies of Bates cannot be easy.

 

[Hiney]

I'm not quite sure what your issue is here. This makes sense to me. I also think the League have handled this well. Dealing with the smoke, mirrors and lies of Bates cannot be easy.

I haven't got any issue with the Leeds thing.

The problem as I see it is that the FL clearly wanted to clarify the situation in the event it happens again (as it surely will), but then release information containing contradictory statements that just make the whole thing look just as VAGUE as it was before.

 

[Simster]

Also this article;

A simple reason behind the defeat of Leeds' appeal | Sport | Guardian Unlimited

I thought from some of the Leeds posters on this board there was a pile of evidence that the league had got this wrong?

Especially that twat, paddy, who seemed to be complicit in assisting Bates with his attempt at shafting the rest of us.

 

[Herr Tubthumper]

I haven't got any issue with the Leeds thing.

The problem as I see it is that the FL clearly wanted to clarify the situation in the event it happens again (as it surely will), but then release information containing contradictory statements that just make the whole thing look just as VAGUE as it was before.

I know what you mean but having re-read it I kind of think it makes sense. There is a benchmark...so if you're more of a twat than Bates you get more points deducted...less of a twat less. I'm not sure how the Ken Bates Twatometer works though.

 

[Starry]

best saved for another day

 

[Monkster]

I see that leeds are due 200k from Stoke, from the Cresswell deal (being promoted to the prem)....bearing in mind this was an arrangement that was done with the OLD Leeds company & not the new one, are Leeds entiltled to this money?

 

[Simster]

better to be a twat and stand up for what you believe in than be a mug and let others walk all over you.

if you want to be unshafted i am more than happy to pay you the 12p i think it works out that you lost out on hmrc last summer.

And your stupid "man of the peepel" routine gets on my tits too. Look at me! I'm a proper football fan, me! I love division 3 more than the Premiership because it's proper fans down here yadda yadda yadda yadda.

Your club fleeced some very worthy creditors then tried to disrupt a ruling that was more than fair. And then you did your best to toe the Bates line. "he's right on this one" you kept saying. And you were wrong. You should have been expelled. So you and your mate Bates can f*** off as far as I'm concerned.

 

[Row Z Creased Shirt]

Your club fleeced some very worthy creditors then tried to disrupt a ruling that was more than fair. And then you did your best to toe the Bates line. "he's right on this one" you kept saying. And you were wrong. You should have been expelled. So you and your mate Bates can f*** off as far as I'm concerned.

Quite.

The ruling from the tribunal only makes clear how LUCKY Leeds were to be playing in our division in the first place. I think Leeds are the only club in the country where there is absolutely nothing to commend them to a neutral. The club management and the fans are just utterly classless, not one ounce of humility amongst them. I hope they get PASTED by Carlisle and they spend another year being the biggest club in Division 3.

 

[Starry]

And your stupid "man of the peepel" routine gets on my tits too. Look at me! I'm a proper football fan, me! I love division 3 more than the Premiership because it's proper fans down here yadda yadda yadda yadda.

Your club fleeced some very worthy creditors then tried to disrupt a ruling that was more than fair. And then you did your best to toe the Bates line. "he's right on this one" you kept saying. And you were wrong. You should have been expelled. So you and your mate Bates can f*** off as far as I'm concerned.

i am far from being a man of the people (thankfully) but i am a football fan, i have enjoyed the football a lot more since we were relegated from the premiership, the champ league days were great but the mundane trips to stadiums full of fake people who 15 years ago didn't know what football was are something i do not miss one bit.

i am certainly not pals with bates either. i was one of those creditors last summer and as has been said on here i did NOT support bates bid to buy back the club, i have said plenty times, that what happened last summer was shameful/disgraceful/embarrassing. i toed a line since then over the 15 points (and not the admin, nor teak, nor astor, nor fsf) that i believed was right and i still do. so the cia didn't accept that. big deal. it's done now.

and yes the £200k comes from stoke into lu07 bank accounts.

 

[sten_super]

i toed a line since then over the 15 points (and not the admin, nor teak, nor astor, nor fsf) that i believed was right and i still do. so the cia didn't accept that. big deal. it's done now.

I'd be interested to know how you can still think that (or in fact how you can ever have thought that, given that you've probably been in posession of the facts since much earlier) given what a damning case the arbitration panel made against Leeds.